Published: Thu, February 15, 2018
Business | By Max Garcia

Global markets move higher, shrugging off stronger-than-expected USA inflation report

Global markets move higher, shrugging off stronger-than-expected USA inflation report

Consumer discretionary and technology stocks led gains. That was a big change after the market's inflation-inspired plunge earlier this month.

Stocks rose sharply on Wednesday, poised to notch a four-day winning streak as banks and tech carried major indexes higher. The move in yields came after the government said consumer prices climbed in January a slightly faster pace than economists had expected.

A pair of reports out today have put the economy on alert: inflation is rising more than expected while retail sales saw their biggest drop in nearly a year.

The Standard & Poor's 500 index rose 6 points, or 0.3 percent, to 2,662.

Cisco Systems, one of the 30 stocks in the Dow Jones industrial average, added 4.6 percent early Thursday after releasing earnings that were much higher than investors were expecting. The Nasdaq composite advanced 0.7 percent.

In late US trading, the Dow ended up 1.7 percent; the S&P 500 up 1.4 percent and the Nasdaq up 1.6 percent.

In the latest economic data, the consumer price index rose by its highest amount in five months in January.

Higher yields, a more aggressive Fed and a growing budget deficit loom as longer-term threats to the economy.

The yields on the benchmark U.S. 10-year Treasury bonds rose to a session high of 2.8730 per cent after falling to 2.8222 per cent earlier. That helped banks, as the higher interest rates make lending more profitable.

Facebook jumped 3.7 per cent while Amazon and Apple both rose more than 1.8 per cent.

"The core CPI estimate is a modest decrease from last month".

On a like-for-like basis revenue per available room - known as RevPAR in the hotel trade - rose 3.8% in the fourth quarter, driven by increases in the average daily rate - hotel room revenue divided by the total number of room nights sold for a given period - and occupancy. In August Netflix announced a deal with "Scandal" and "Gray's Anatomy" creator and producer Shonda Rhimes.

Leading the early gainers was Cisco, whose shares jumped almost 8 percent in premarket trading after the network gear maker posted upbeat results and forecast.

The Federal Reserve has an inflation target of 2 percent. That was a significant improvement from modest annual growth rates of around 2 percent the US experienced during the economic recovery, now in its ninth year.

The EIA Petroleum Status Report showed an increase in oil inventory of 1.8 million barrels for the week.

In other energy trading, wholesale gasoline fell 2 cents to $1.68 a gallon.

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